Whenever I hop on a conference call, someone asks, “Where are you located?” And then their eyes widen when I respond, “Lima, Peru.”
But back when I invested in rental properties, I did so in my hometown of Baltimore. It was only after I moved abroad that I discovered just how much I had subsidized those properties with my own labor.
When people ask me today what I would do differently if I were to start investing in real estate all over again, I have an answer ready—because I did start over again.
My “Landlord Era”
I bought my first rental property in 2005, and I had no idea what I was doing. Then I bought another dozen properties over the next three years, and I still didn’t know what I was doing.
To begin with, I didn’t understand how cash flow worked. It proved a costly and embarrassing mistake.
Worse, I bought in unforgiving, low-end neighborhoods in Baltimore City. I didn’t understand that low-end properties come with countless hidden costs that don’t show up on paper—costs like crime and vandalism, high turnover rates, heavy tenant wear and tear, and constant eviction filings to chase down delinquent tenants for rent.
Oh, and there’s the fact that skilled property managers avoid them, because they pay half as well and come with twice as much work. That leaves you with the dregs of property management.
I also didn’t realize just how much harder life is when you invest in anti-landlord jurisdictions like Baltimore City. It took me 11 months to get a “professional tenant” out of a property once.
I did this for a decade. And I hated it.
Moving Abroad Kicked the Crutch Away
When I moved overseas in 2015, suddenly, I couldn’t spend my nights and weekends driving to properties, coordinating with handymen, and staying on top of ineffectual property managers.
I reluctantly had to admit to myself that as bad as my returns had looked on paper, they were actually worse than…